Standard Cost: Difference between revisions
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The "Standard Material Cost Per Unit" or "Standard Cost" field in your system is designed to provide you with precise control over the display and recording of material costs. It adheres to the decimal places preference you have set. Below are key points regarding its behavior: | The "Standard Material Cost Per Unit" or "Standard Cost" field in your system is designed to provide you with precise control over the display and recording of material costs. It adheres to the decimal places preference you have set. Below are key points regarding its behavior: | ||
# '''Decimal Places Preference''': The standard material cost per unit is influenced by the decimal places preference you have configured in your system Preference settings. This preference determines the level of decimal precision displayed throughout the application. | # '''Decimal Places Preference''': The standard material cost per unit is influenced by the decimal places preference you have configured (Preferences setting), in your system Preference settings. This preference determines the level of decimal precision displayed throughout the application. | ||
# '''Retaining Precision''': If a standard cost was originally recorded with more decimal places than specified in your preference, the system retains the original level of precision. For instance, if your preference is set to 2 decimal places, but a product price was initially calculated with 6 decimal places (e.g., 12.678912), it will be recorded as such. Subsequently, when you access the standard cost, it will display the full decimal value (12.678912), even though your preference is set to 2 decimal places. | # '''Retaining Precision''': If a standard cost was originally recorded with more decimal places than specified in your preference, the system retains the original level of precision. For instance, if your preference is set to 2 decimal places, but a product price was initially calculated with 6 decimal places (e.g., 12.678912), it will be recorded as such. Subsequently, when you access the standard cost, it will display the full decimal value (12.678912), even though your preference is set to 2 decimal places. | ||
# '''User-Initiated Changes''': Users have the flexibility to manually adjust the decimal places for the price. If a user changes the price to a lower decimal places value, for instance, 12.6789, the system will capture the new price with the reduced precision (12.6789). However, if the user attempts to revert to the original precision of 6 decimal places (12.678912), the system will not automatically restore it. | # '''User-Initiated Changes''': Users have the flexibility to manually adjust the decimal places for the price. If a user changes the price to a lower decimal places value, for instance, 12.6789, the system will capture the new price with the reduced precision (12.6789). However, if the user attempts to revert to the original precision of 6 decimal places (12.678912), the system will not automatically restore it. | ||
Latest revision as of 13:55, 16 October 2023
Standard Material Cost Per Unit and Decimal Precision (Standard Cost)
The "Standard Material Cost Per Unit" or "Standard Cost" field in your system is designed to provide you with precise control over the display and recording of material costs. It adheres to the decimal places preference you have set. Below are key points regarding its behavior:
- Decimal Places Preference: The standard material cost per unit is influenced by the decimal places preference you have configured (Preferences setting), in your system Preference settings. This preference determines the level of decimal precision displayed throughout the application.
- Retaining Precision: If a standard cost was originally recorded with more decimal places than specified in your preference, the system retains the original level of precision. For instance, if your preference is set to 2 decimal places, but a product price was initially calculated with 6 decimal places (e.g., 12.678912), it will be recorded as such. Subsequently, when you access the standard cost, it will display the full decimal value (12.678912), even though your preference is set to 2 decimal places.
- User-Initiated Changes: Users have the flexibility to manually adjust the decimal places for the price. If a user changes the price to a lower decimal places value, for instance, 12.6789, the system will capture the new price with the reduced precision (12.6789). However, if the user attempts to revert to the original precision of 6 decimal places (12.678912), the system will not automatically restore it.
- Permanent Changes: Further changes made by the user will be recorded according to the new precision setting. For instance, if the user subsequently changes the price to 12.68, it will be stored with 2 decimal places. Unless the preference is adjusted to a higher decimal places setting, the recorded precision will remain at 2 decimal places (e.g., 12.68).
Understanding and managing the decimal precision in the "Standard Material Cost Per Unit" field ensures accurate representation and control of costs in your system. Make sure to adjust your preferences as needed to match your reporting and recording requirements.
Highnix ERP's Standard Weighted Average Cost Formula:
The standard weighted average cost is calculated using a formula that combines the cost of newly acquired units with the cost of the existing inventory. The formula is as follows:
Standard Weighted Average Cost = (Newly Acquired Quantity * Unit Price) + (Current Inventory Quantity * Standard Cost) / (Newly Acquired Quantity + Current Inventory Quantity)
In this formula, the "Newly Acquired Quantity" represents the number of units recently purchased or produced, the "Unit Price" is the cost per unit for the newly acquired items, and the "Current Inventory Quantity" is the total number of units already in stock. The result of this calculation provides a precise cost per unit, considering both new and existing inventory, ensuring accurate financial reporting and inventory valuation.